CANADA FX DEBT-C$ lower despite brief boost from jobs data

Reuters Staff

3 Min Read

* Rises as high as C$1.1615 to the U.S. dollar

* Fewer Canadian jobs lost in June than expected

* Bond prices higher across curve

By Frank Pingue

TORONTO, July 10 (Reuters) - The Canadian dollar was lower
versus the U.S. currency on Friday as early gains made after a
domestic jobs report beat expectations were handed back as a
closer look at details of the report revealed weakness.

Canada's currency rallied as high as C$1.1615 to the U.S.
dollar, or 86.09 U.S. cents, after data showed fewer Canadians
lost their jobs in June than expected. [ID:N10253705]

But the domestic currency quickly relinquished all the
gains and turned lower versus its U.S. counterpart as the
report also revealed that the only strength came from part-time
employment and that recession still gripped the economy.

"You got the people that react immediately to what the
headline is regardless of the details, but it didn't take long
to look into the details to realize that this was not a strong
report." said David Watt, senior currency strategist at RBC
Capital Markets. "If anything, it was a very weak report."

By the 7:50 a.m. (1150 GMT), the Canadian unit had fallen
back to C$1.1632 to the U.S. dollar, or 85.97 U.S. cents, down
from C$1.1623 to the U.S. dollar, or 86.04 U.S. cents, at
Thursday's close.

Once it gave up the post-data gains, it fell as low as
C$1.1645 to the U.S. dollar, or 85.87 U.S. cents, before
recovering slightly.

It could be stuck lower for the remainder of the session as
commodity prices, often key drivers of the Canadian currency
given the nature of Canada's exports, were lower.

Oil prices fell below $60 a barrel and were poised for
their biggest weekly fall since January as traders focused
economic uncertainty. [ID:nSP476597] Gold, down 2 percent this
week, fell further given a stronger greenback. [ID:nLA430812]

"A lot will depend on oil prices, but I don't think that
the employment report is going to give any lift to the Canadian
dollar by the end of the day.

Barring a sharp turnaround, the Canadian dollar will close
lower for the fourth straight week.

Bond prices remained higher across the curve as they
managed to shrug off the jobs data and follow the bigger U.S.
Treasury bond market up given investor relief that this week's
$73 billion worth of bond auctions in the United States were
out of the way.
(Editing by Jeffrey Hodgson)